How to BRRRR multifamily

[Eric Upchurch]

Anyone experienced with using the BRRRR strategy for MFR? I'm interested to know the differences (pros/cons) with refinancing on a commercial loan vs. conventional for residential. Any typical seasoning requirements? Or do you just need to show a certain economic occupancy and revenue of the newly rehabbed property?

Thanks, BP!

[Greg Scott]

Eric:

The answer depends on what you mean by MFR.

Anything with 4 or fewer units, is financed as a single family property. That means houses, duplexes, triplexes, and quads all can use conventional financing and would follow the same BRRRR strategy as single family.

Apartments, at 5 units or above, get commercial loans. It is actually easier to do the BRRRR on apartments because the financing is easier. Cash out refinance is a regular and normal occurrence in apartments. To cash-out refi in apartments, you need to demonstrate you have improved the value of the property by improving NOI.